Which of the following helps explain why the law of supply exists?
A) Larger outputs result in lower costs of production.
B) The law of increasing opportunity cost
C) The costs of production remain constant throughout all levels of output.
D) Sellers realize that if the price increases, they make larger profits and do not need to change their production.
E) The law of demand
B
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A monopolist faces the inverse demand curve P = 60 - Q. It has variable costs of Q2 so that its marginal costs are 2Q, and it has fixed costs of 30. The monopoly's maximum profit is
A) 220. B) 370. C) 420. D) 510.
The price elasticity of demand for eggs is 0.27. Therefore, an increase in the price of eggs will cause:
A. a decrease in egg suppliers' total revenue. B. an increase in the demand for eggs. C. an increase in egg suppliers' total revenue. D. an increase in the quantity demand of eggs.
The costs which can be avoided if we alter our decisions or choices are referred to as:
a. average costs. b. opportunity costs. c. marginal costs. d. sunk costs.
Refer to the figure below. Private incentives in this market generate deadweight loss equal to ________.
A. ½ × UW × LM B. ½ × VW × KM C. ½ × UV × LN D. ½ × VW × LN